Oral replies to questions in the National Assembly by President Jacob Zuma

22 June 2017

7. The Leader of the Opposition (DA) to ask the President of the Republic:

In light of the economy that moved into a formal recession on 6 June 2017 and the fact that he has not yet addressed the House or made an official statement on the matter in the National Assembly, (a) what is the Government’s official response to the recession and (b) which specific sectors of the economy will the Government be targeting as part of its plan to mitigate the economic damage caused by the recession and to reignite economic growth?
     
Reply:

Honourable Speaker,

The economy has moved into a technical recession, measured by two consecutive quarters of a decline in GDP. This situation is of serious concern to government given the impact on our economy and also directly on our people.

It is also worth highlighting that the economy, however low, expanded by 0.6 per cent on a year on year comparison between the first quarter of 2016 and the first quarter of 2017.

South Africa is part of the global economy where countries across the world have been struggling for growth and recovery from the financial crisis of 2008.

In order to ensure that we can turn the economy around in the shortest possible time, we are drawing on the experience of 2008/2009 when the economy had previously been in recession.

Top of our priorities will be to fast-track the implementation of pro-growth measures and structural reforms.

We are working to reignite growth informed by the Nine Point that we launched recently.

The interventions include the areas of energy, manufacturing, transport, telecommunications, water, tourism, the ocean economy, mining, agriculture and the Industrial Policy Action Plan, as well as managing workplace conflict.

We are also improving our exports to the rest of the continent and reclaiming parts of the domestic market. Micro-economic reform together with ensuring more local spend by government will also assist.

Unblocking new investment and ensuring better coordination across the range of economic policy instruments available to the state and with our social partners, will be important.

There are a few initiatives that I will highlight:

First, we must boost the rate of investment in the economy. An example of our efforts is the One-Stop-Shop in the form of Invest SA that has been launched recently.

Second, we need to boost investment in infrastructure. The last Cabinet Lekgotla received a report on a road-maintenance programme that provides livelihoods and incomes to about forty thousand people in KwaZulu-Natal, largely women-headed households. Our focus will be to massify more of the infrastructure delivery programmes.

Third, we need to speed up competition in the economy. The competition authorities are currently embarking on far-reaching investigations of various markets, ranging from health-care, to transport and grocery retail. These market inquiries will help to ensure that more dynamic markets can emerge in key sectors of the economy.

Fourth, we are speeding up efforts to ensure regulatory certainty.

This will include areas such as spectrum allocation, the Independent Power Producer procurement programme and land reform so that investors have greater clarity on what public policy expectations and resources are.

Part of our work will need to focus on turning around poorly-performing State Owned Companies so that they are able to produce key utilities to the economy on a reliable and cost-effective basis.

Fifth, we are deepening the efforts at social partnership. The Honourable Member would have seen the results of these efforts from the broad agreement on a national minimum wage. More efforts to build partnership with business and labour will be pursued.

These efforts, together with measures to boost youth employment and deepen trade relations with the rest of the continent, will form part of our coordinated package to keep the technical recession as short as possible and to reignite economic growth.

I thank you.

8. Rev K R J Meshoe (ACDP) to ask the President of the Republic of South Africa:

Whether, notwithstanding that he has taken certain aspects of the remedial action contained in the Public Protector’s State of Capture report on judicial review and whilst acknowledging his decision to appoint a commission of inquiry into various matters related to state capture, he will ensure that allegations of criminality, based on prima facie evidence contained in the specified report, will be expeditiously investigated by the relevant law enforcement agencies; if not, why not; if so, what are the relevant details?
       
Reply:

Honourable speaker,

Law enforcement agencies have a responsibility to investigate all allegations of criminality in the country.

They must therefore be afforded space to deal with the matter as they deem fit and in terms of the law.

I thank you.

9. Ms P C Ngwenya-Mabila (ANC) to ask the President of the Republic:

(a) What government programmes are in place to strengthen engagement with sector stakeholders in delivering on the radical socio-economic programme in the rural economy and (b) what benefits are we seeing as a result of these programmes?
      
Reply:

Honourable Speaker,

Government has a number of programmes to transform the rural economy.

These include Agricultural Parks; the Strengthening of Relative Rights Programme; and the One Household One Hectare and One Household Two Dairy Cows Programme.

The agricultural parks programme, for instance, seeks to improve production by small holder farmers, access to markets, finance and research and engagement in the whole agriculture value chain.

It is designed to promote collaboration between government, the private sector, and rural communities.

The Strengthening of Relative Rights Programme seeks to secure the land rights and residential tenure of the farm-dweller or farm worker; empower people working the land to acquire majority equity-holdings in farming enterprises and bring about economic transformation of the agricultural sector.

In this programme too, government works closely with all the stakeholders involved.

The One Household One Hectare Programme and One Household Two Dairy Cows Programme is intended to improve production and food security at household level in order to contribute to the increase in the number of small holder farmers.

The collaboration of stakeholders is also evident in programmes such as the electrification of rural communities through the Integrated National Electrification Programme; the provision of the Broadband Internet Services Programme which connects schools, clinics and other government buildings to broadband; and the provision of water and sanitation infrastructure in rural communities.

One of the successful programmes is the Water Services Infrastructure Grant which prioritises 27 poor district municipalities and the Regional Bulk Infrastructure Grant which focuses on smaller municipalities.

There are also Conditional Grants such as the Comprehensive Agricultural Support Programme that helps in ensuring inclusive growth in the rural economy and has benefited many rural communities through job creation.

Since inception, the Comprehensive Agricultural Support Programme has been allocated about 9.6 billion rand to deliver comprehensive support service to subsistence, smallholder and emerging black commercial farmers.

I thank you.

10. The Leader of the Opposition (DA) to ask the President of the Republic:

Whether, in light of his statement on the acquisition of nuclear energy during the Debate on Vote No 1 – The Presidency, Appropriation Bill, in the National Assembly on Wednesday, 31 May 2017, and the contradictions between the Government’s plans to address future energy needs and public statements made in this regard in light of the country’s actual predicted future energy needs, the Government is still intent on pursuing its nuclear new build programme after the Western Cape High Court ruled on 26 April 2017 that all processes and agreements followed to date in the Government’s pursuit of nuclear power were unlawful and unconstitutional; if not, what is the position in this regard; if so, will the Government commit to pursue any future nuclear deal with maximum transparency given the opportunity for wide-scale corruption?
        
Reply:

Yes, Government is still intent on pursuing the Nuclear New Build Programme at a pace and scale that the country can afford, as part of the general energy mix that we are pursuing in order to ensure energy security for the country.

The energy mix also includes hydro, solar, coal, wind and gas.

With regard to nuclear, Government is committed to a process that is open and transparent, cost effective and competitive. The transparent approach to the programme will ensure that the risk of any deviation from constitutionally acceptable procurement norms is reduced.

It is important to note that the Court found fault with the process that was followed especially in tabling the Intergovernmental Agreements in preparation for the Nuclear New Build Programme.

The Judgment does not deal with substantive matters pertaining to the country’s future energy programmes.

The Nuclear New Build Programme is informed by the Nuclear Energy Policy of 2008, which outlines roles and responsibilities for various nuclear organisations and South Africa’s goal to become self-sufficient in all aspects of the use of nuclear technology for peaceful uses.

I thank you.

11. Ms F S Loliwe (ANC) to ask the President of the Republic:

The release of the first quarter employment statistics reflect that the jobless rate has risen to 27.7% and whilst we are aware that there are more persons today in employment than in 1994 and that the unemployment rate has remained constant since 1994, (a) what are the key reasons for this and (b) what are the ongoing plans, including policy, programmes and new initiatives of the Government to address this in the future?    

Reply:

Honourable Speaker,

The latest report from Statistics South Africa does indicate that the unemployment rate in South Africa increased to 27.7 percent in the first quarter of 2017 from 26.5 percent in the previous period, bringing the unemployment rate average to 25.41 percent for the 2000 to 2017 period.

The key reasons for these trends vary but they are all very much a reflection of the current global economic outlook. Economic growth globally has been very weak since the global financial crisis which started in 2008. This crisis has contributed to increased unemployment not only in South Africa but also in other countries.

There are also domestic factors that have contributed to weak economic growth in our case.

These include but are not limited to the impact of the recent drought which adversely affected the agricultural sector in particular. It is good that this sector is now recovering well.

Even when our economy was growing it was not absorbing the large number of young people in particular who are looking for employment.

Government has introduced several measures since 2009 to reignite economic growth and create jobs. These include the National Development Plan, which outlines several sectors and measures for taking the South African economy to a higher growth path.

Government also continues with measures to provide support to affected workers during this period. The Department of Labour continues to implement Labour Activation programs to support the Unemployment Fund Beneficiaries and job seekers.

The Department, through the Unemployment Insurance Fund (UIF), has paid out more than R5 billion in the form of income support, to unemployed contributors as part of social security safety net.

The UIF also undertakes a number of Skills Training Programmes through the Labour Activation Programme to raise the employability prospects of job seekers.

The Department also administers the Training Lay-off Scheme which is designed to assist companies in distress in order to avoid retrenchments.

The Unemployment Insurance Fund benefits have also been increased up in order to provide the-much-needed relief on a much more improved scale and scope.

Our industrial policy continues to offer financing and other forms of support to black people as part of our transformation programmes, such as the black industrialists programme.

Our competition policy also continues to tackle cartels and the abuse of market power, and to use market inquiries to probe the state of competition in many parts of our economy.

We will also be working hard to enter into more effective partnerships with the private sector, and to enhance the compacts between business, labour and government.

In the National Development Plan we set the goal of creating 11 million jobs by 2030. This remains the goal that government, business, labour and all South Africans must focus on achieving.

I thank you.

12. Mr M P Galo (AIC) to ask the President of the Republic:

Whether, with reference to the nationwide protest marches calling for his resignation, the court application for his impeachment that is set to be heard by the Constitutional Court of South Africa and the report of the probe sponsored by the SA Council of Churches entitled Unburdening Panel, which alleges that under his leadership South Africa is on the brink of becoming a Mafia state, he intends to step down and allow for other leadership to take the reigns?         

Reply:

Honourable Speaker

There is no application before the Constitutional Court for my impeachment. The Constitutional Court today has affirmed the separation of powers and outlined what is to be done in matters of this nature.

South Africa is a democratic state where the right to protest and the right to approach the Courts of Law are guaranteed by the Constitution.

Section 17 of the Constitution also enshrines the freedom of expression and the right to assemble, demonstrate and protest.

I thank you.

13. Ms H H Malgas (ANC) to ask the President of the Republic:

With regard to the Government’s White Paper on Comprehensive Social Security, which proposes the establishment of the National Social Security Fund, how will the fund (a) operate and (b) benefit the most vulnerable sectors of the communities?             

Reply:

Honourable Speaker,

The proposed National Social Security Fund (NSSF) will operate as a national fund responsible for administering mandatory contributions from all workers for the provision of retirement, death and disability benefits.

The proposals are under discussion at NEDLAC.

The fund will serve as a single platform through which all workers can make regular social security contributions while they are still working to avoid falling into poverty in the event of retirement or disability.

All income earners will be required to participate, and this will foster social solidarity and the sharing of risks among all workers.

Furthermore, the Fund will provide an income to the dependants of all contributors who happen to die before retirement.

The benefits will be defined benefits where benefits are guaranteed in order to protect contributors and foster social solidarity.

Those who earn low incomes will be supported through a contribution subsidy to reduce the burden on their disposable income.

The benefit design of the Fund is crucial for the protection of vulnerable workers in our country.

At present, the existing retirement benefit schemes are based on defined contributions rather than defined benefits.

This means that the contributors have no guarantee of how much their benefits will be, and they face the risk of losing their savings in the event of poor market performance.

In contrast, the Fund will carry the risk of poor investment performance on behalf of individual contributors, and thus provide assurance of a guaranteed benefit to all workers and their households.

I thank you.

Issued by The Presidency, 22 June 2017